{"id":23976,"date":"2025-05-15T07:30:00","date_gmt":"2025-05-15T11:30:00","guid":{"rendered":"https:\/\/jeffclarktrader.com\/market-minute\/?p=23976"},"modified":"2025-08-22T08:32:22","modified_gmt":"2025-08-22T12:32:22","slug":"stock-market-breadth-is-stalling-at-this-key-moving-average","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/stock-market-breadth-is-stalling-at-this-key-moving-average\/","title":{"rendered":"Stock Market Breadth Is Stalling at This Key Moving Average"},"content":{"rendered":"
\n

Managing Editor\u2019s Note: <\/strong>Today, we\u2019re hearing from our contributing editor Mike Burnick in his weekly Thursday feature.<\/p>\n

Mike has over 30 years in the investment and financial services industry \u2013 from operating as a stockbroker, trader, and research analyst, to running a mutual fund as a registered investment advisor and portfolio manager, to being Research Director for the Sovereign Society, specializing in global ETF and options investing.<\/p>\n

And he\u2019s been a senior analyst at TradeSmith for three years, running Constant Cash Flow, Infinite Income Loop, <\/em>and Inside TradeSmith<\/em>.<\/p>\n

Here\u2019s Mike\u2026<\/p>\n<\/div>\n

Stock Market Breadth Is Stalling at This Key Moving Average<\/h2>\n

BY MIKE BURNICK, CONTRIBUTING EDITOR, MARKET MINUTE<\/em><\/strong><\/p>\n

Stocks have enjoyed a robust relief rally over the past month after tariffs were paused in early April. The move was capped in spectacular fashion this week with news of a temporary tariff truce between the U.S. and China.<\/p>\n

Now the question is, will it last\u2026?<\/p>\n

That is, both<\/em> the tariff truce and<\/em> stock market rally.<\/p>\n

The good news is the S&P 500 and the Nasdaq were both able to reclaim their 200-day moving average (MA) early this week.<\/p>\n\n\n

\"\"<\/figure>\n\n\n

That\u2019s a key technical level investors watch closely. When prices are above the 200-day MA, it\u2019s considered an uptrend.<\/p>\n

And when price is below\u2026 well, nothing good tends to happen in a downtrend.<\/p>\n

In fact, according to a study by Fidelity, the S&P 500 delivered average returns of 11.9% annually when above this key moving average. That compares to a -4.3% yearly return when trading below it.<\/p>\n

So, for now it looks like a spectacular reversal of fortune for the stock market, which is welcome news.<\/p>\n

But just keep in mind… the S&P is only about 150 points (or 2.7%) above its 200-day MA. This means stocks are just one bad day<\/em> away<\/em> from slipping into a downtrend again.<\/p>\n

Speaking of moving averages, historical research also shows the more S&P 500 component stocks are above their own 200-day MAs, the better the gains for the overall market index.<\/p>\n

And this metric may be bad news if you\u2019re expecting more fast-paced stock market gains.<\/p>\n\n\n

\"\"<\/figure>\n\n\n

The charts above show the percentage of component stocks above the 200-day MA for both the S&P 500 (at left) and the Nasdaq (right). The upside participation has apparently stalled out.<\/p>\n

For the S&P 500, breadth barely rose above the 50% mark. And for Nasdaq stocks, only 36.5% of them are above the 200-day MA right now.<\/p>\n

Surprisingly poor breadth from the “rank and file” stocks. And that’s especially true considering the rip-roaring pace of the recent move from the April 7 low.<\/p>\n

Mike Burnick’s Bottom Line<\/em><\/strong>: By several measures that Jeff shared recently<\/a>, stocks are as overbought now as they were oversold in early April. And while more gains are likely for stocks over the next six to 12 months, I would not be surprised to see a market pullback first. In other words, odds are good we’ll see S&P 5500 again before S&P 6500.<\/p>\n

Good investing,<\/p>\n

\"Signature\"<\/p>\n

Mike Burnick
\nContributing Editor, Market Minute<\/em><\/p>","protected":false},"excerpt":{"rendered":"

Stocks are as overbought now as they were oversold in early April.<\/p>\n","protected":false},"author":100,"featured_media":0,"comment_status":"closed","ping_status":"0","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ep_exclude_from_search":false,"service":"","footnotes":""},"categories":[1],"tags":[],"publication":[10],"person":[155],"newsletter-type":[],"ticker":[],"class_list":["post-23976","post","type-post","status-publish","format-standard","hentry","category-market-minute","publication-market-minute","person-mike-burnick"],"acf":[],"_links":{"self":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/23976","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/users\/100"}],"replies":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/comments?post=23976"}],"version-history":[{"count":3,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/23976\/revisions"}],"predecessor-version":[{"id":25052,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/23976\/revisions\/25052"}],"wp:attachment":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=23976"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=23976"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=23976"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=23976"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=23976"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=23976"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=23976"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}